When the San Francisco jazz venue and restaurant Yoshi's filed for Chapter 11 bankruptcy in 2012, its representatives said there was no chance of the club closing — that the move was only intended to restructure debts incurred since its founding in 2007.
They were, alas, wrong.
Yoshi's SF is not closing right away. But after six full years, the managing owners of the lauded Japanese restaurant and live music venue are relinquishing the business to a rival group of partners. Assuming the many involved parties bless the deal and the sale takes effect July 1, Yoshi's SF will have no more connection to its older, more established sister club in Oakland. Within three or four months, it will have a new name; before then, its celebrated but pricey Japanese cuisine will give way to a more accessible, more affordable menu. The live music program, which in the last few years had moved beyond jazz into R&B, world music, and hip-hop, will expand even further, though not for a while yet. (The 420-seat club is already booked through the summer.)
So while there will remain a music venue and restaurant in the space, owned by some of the same people, Yoshi's SF as it's currently known will expire. The new owners say the club never truly connected with the surrounding community, and stuck to a business formula long after its poor economic performance was clear. But Yoshi's managers say the business was a victim of mountainous debts and impossibly high rent. "We put up a good fight — were on an upswing," says Lisa Bautista, Yoshi's director of marketing and public relations. "That's what makes it really sad."
The end of Yoshi's SF delivers an all-but-final blow to the original aims of the Fillmore Jazz Preservation District, of which the club and restaurant was supposed to be a central feature. The City of San Francisco launched the project partly as a way to atone for 1960s redevelopment programs that drove thousands of black residents from the neighborhood and destroyed a vibrant cultural center. But the Jazz Preservation District hasn't rekindled anything like the "Harlem of the West" that once existed in the Fillmore. Last summer saw the closure of Rassela's, another roomy jazz venue and restaurant up the street from Yoshi's; its owner blamed a distracted city government for not helping to keep black-owned business along Fillmore alive. Meanwhile, the opening of the $63 million SFJAZZ Center at Franklin and Fell moved the city's jazz capital to Hayes Valley, closer to BART and other cultural hubs like the symphony and the opera. While the club replacing Yoshi's will book some jazz, the music — which has been in popular decline for decades — will not be central to its identity.
"We're not going to be a quote 'jazz club,'" says local developer Michael Johnson, the managing partner of the new Fillmore Live Entertainment Group, which is taking over the Yoshi's space. "There's a wide range of music that will occur there."
The sale of Yoshi's SF concludes a multiyear financial battle between two groups of owners. Yoshi's SF was managed and majority-owned by the same people who run the Oakland club, including co-founder and president Kaz Kajimura. But its minority owners, led by Johnson, built the mixed-use structure that houses Yoshi's SF, and were its landlords.
When Yoshi's opened in 2007, it was already saddled with debt. The venue had cost $15 million to construct — more than twice the estimated amount — and opened only months before the global financial meltdown, which drastically curtailed nightlife spending. Yoshi's regularly brought in $9-$10 million or more a year, but even then, paying down all its debts and covering the more than $60,000 per month in rent, taxes, and maintenance charges made it difficult for the club to reach profitability.
By June 2012, Yoshi's could no longer cover its rent and debts along with day-to-day expenses. In the midst of a conflict with the minority partners, Kajimura and the majority sought bankruptcy protection, urging the court to restructure the business's debt and possibly reduce its rent. "Yoshi's consistently sees a significant positive operating margin before rent and debt service," he wrote in a February 2014 court letter, "but is unable to break even as a result of occupancy costs that are double or triple the norm in the industry." But, as landlords, Johnson and the minority owners opposed the bankruptcy push. A judge sent the warring parties to mediation, where the current deal was hashed out. Kajimura and the Yoshi's Oakland owners are out, and Johnson's new Fillmore Live Entertainment Group will take over the business, along with some of its debts.
But only some. Yoshi's was built with the help of a $7.2 million redevelopment loan from the city. A representative for Johnson's development firm tells SF Weekly that under the new agreement, the city plans to forgive $5 million of the loan — which likely means $5 million of public money meant to seed the growth of a now-foundering jazz district will simply disappear.
Even before its financial troubles became clear, many regarded Yoshi's as an odd fit for the neighborhood. A city-hired consultant scrutinized Yoshi's and the surrounding jazz district in 2009 and 2010, and found Yoshi's food overpriced, its service "standoffish," and its setting cold and empty-feeling. Many residents surveyed said they weren't attracted by jazz. Some of these criticisms were addressed, and the venue broadened its music bookings. But the management of the business, which the report called "inflexible," stuck largely to the jazz-and-Japanese formula that had succeeded in Oakland, regardless of how it worked in San Francisco.
Peter Williams, who will be booking the new club, says he's happy with the expanded range of music Yoshi's has recently hosted, and wants to grow it further, with more world music and singer-songwriters. Other than electronic dance music and hardcore punk, he can't think of any genres he would confidently say won't be considered for booking. "We want to build an audience of people who know that they're going to see something great in the room, no matter what it is," he says.
Whether that happens is anyone's guess. The revamped business will still have to pay a rent comparable to Yoshi's, according to Johnson, so it's not necessarily out of financial peril. But the new management of the music venue and restaurant on Fillmore is betting that with smaller debts, lower food prices, and more expansive music bookings, it'll succeed where Yoshi's did not.